Did you know that you can lock your credit report? It’s a great way to keep your identity safe from thieves. In Australia, locking your credit report is known as placing a “credit ban” or “credit freeze.”
Lenders use your credit score to assess your borrowing capacity and the prospect of making payments on debts. As personal data breaches and hacking grow more common, should you be locking down your credit report as a means of protection against identity theft and fraud?
Why you may need to lock your credit report
The recent Optus hack was a harsh wake-up call that your personal information is always vulnerable to theft in the digital age. The customer network of Optus includes almost 10 million Australians.
In response to the cyberattack Optus offered the “most affected current and former customers”, whose information was compromised, a 12-month Equifax Protect package at no cost. Equifax
When it comes to identity theft, having credit monitoring and protection is a must. If you believe your personal information has been stolen, you may ask Equifax to place a fraud alert on your credit report. This will prevent financial institutions from looking at your credit report when conducting a credit check. But how often should you check your credit report?
What are the consequences of locking your credit report?
It’s worth considering the consequences of restricting access to your credit report. While locking your report might prevent someone from using your name to obtain credit, it isn’t always a guarantee option. Searching your report for unusual activity may be prevented by locking your score.
If you place a ban with each credit reporting body in Australia, including Equifax, Expirian and Illion, none of the credit providers will be able to see your information. It is crucial to inform all three companies if you’re planning on doing this so that they are aware.
If you need to apply for credit while a ban is in place, you’ll need to take extra steps. You must provide written consent to the specific credit provider, allowing them to access your credit report. This process typically involves contacting the CRB that placed the ban and requesting a temporary lift for a specific lender. You’ll need to provide details about the lender and possibly a timeframe for the temporary lift. This extra step adds a layer of security but also means that applying for credit will take longer than usual.
How long does a ‘credit ban’ last?
The initial duration of a credit ban is 21 days. This period is designed to provide immediate protection while you assess your situation and gather any necessary evidence if you need to extend the ban. The 21-day period starts from the day the CRB processes your request, not necessarily from the day you make the request. It’s important to note this timeline, especially if you’re planning to apply for credit in the near future.
Other considerations
- Cancellation: You can cancel the ban at any time by notifying the CRB in writing.
- Extension: If needed, you can extend the ban beyond the initial 21 days, typically for up to one year.
- Application methods: You can request a credit ban online, by email, or by phone with any of the three major credit report bodies.
Personal data is more vulnerable than ever before, so it’s critical to be vigilant about who has access to your information and how secure it is. Never give out personal details to strangers or people you don’t know well. And always confirm the legitimacy of any organization that asks for your info–this includes social media platforms, banks, phone networks, utility companies, mobile apps, etc.
